RedeyeAV8r

No, as I understand it, the company won't give YOU or I anything.

You will give your tax return paperwork to Price Waterhouse Cooper ( or whoever they decide on). Your overall tax return will be prepared and any excess taxes liability will be paid by FedEx (you won't receive it but it will be paid on your behalf) . If say you live in Kansas today and decide to take an FDA slot, you shouldn't pay anymore total taxes based in HKG or CDG as you would if you had remained in Kansas...............

The catch is you might be earning more income over there because of the possibility of an additional $2700/month and a $10,000 cash bonus. (notice I didn't say making more, just earning more on paper).

Anyway if the Company pays the US and French/HKG government $6000 (or whatever $ amount) on your behalf, that will be included in your W-2 gross income and YOU will pay taxes on that 6000 the company paid on your behalf (not the company).

You and I might be sdaying the same thing...........there is nothing simple/straight forward about taxes.

Tax equalization form FedEx or any Corp wasn't intneded to be a Financial Gain. It is intended to reduce any additional Tax burden incurred by living and working abroad. Some of us will benefit more than others depending on individual situations.

FDXLAG

According to JL all extra taxes on extra money covered by Fred. Tax Equalization very good for most of us. STV still sucks.

fdx727pilot

No, that is the "gross-up" concept. If you owe $6000 extra (above your assumed stateside burden,) and PW figures you are in, say the 33% tax bracket, they "gross-up" the $6000 to $9000. $6000 pays the original tax burden, while the remaining $3000 pays the tax on the $9000 extra tax money. See the multiple posts above, esp 27 & 34. Come on. You seem like a pretty smart guy. I'm junior to you, no point in giving an aneurysm!!

RedeyeAV8r

That is not how it was explained to me........I'll concede I fairly smart, but I am not a tax expert. I guess the point I was trying to make was a Pilot might be paying in some cases an addtional $2,000-$,3000 addtional in a tax burden, which is far better the $15,000-20,000

I think we can both agree that it is a necessary thing for us to have!

fdx727pilot

Well, they would have to, if the are using an "Assumed stateside" tax burden. If PW looks at your pay info, and decides your stateside bill would be $36K on MEM NB Cap salary (using my situation, even though I'm not bidding it) and that as a 75 Cap in CDG, the total is $70K, including the extra housing money and the exclusion, and everything. They will have to throw in enough cash (well above $34K) to pay the additional taxes in "after-tax money." Otherwise, as you said, you would owe taxes on that $34K. However, then your tax burden is more than your stateside burden, and tax equalization has failed. I think PW can figure out how much Fred has to pay to get you $34K in after-tax money to cover the extra tax burden. This gross-up process was also talked about by DW at the Germantown roadshow.

That's the way it worked at a previous carrier with a foreign domicile. Also, I will admit, this might not be a good deal for, say, a new-hire FO in HGK, who would probably do better without equalization. However, anyone who has been here a few years, is a Capt, or is in CDG will make out IMHO.

BrownGirls YUM

Precisely why it needs to be optional.

RedeyeAV8r

Nothing will equal the Tax deal you SFS guys are getting now. Sorry but the party appears to be ending.

BrownGirls YUM

A true statement yet completely non-germane to the topic.

Now, do you think it's fair that a person who goes to Hong Kong be FORCED to pay more than their actual legal tax burden, with the difference going into the company coffer? You think that's fair? What does that have to do with Subic, Newark, or Oakland for that matter?

It's funny that the company talks about how the Subic people will not benefit from tax equalization. No $hit. it isn't applicable to Subic and this LOA isn't applicable to Subic. Subic is closing. Leave Subic OUT of the tax discussion.
Let's talk about HONG KONG, taxes and "equalization".

Let's see the numbers.

dckozak

Look, all the discussion over tax equalization, does anyone have the facts?? Can the union give us the straight scoop about who wins, by how much, if anyone actually looses by the company. GIVE US THE DETAILS. But here is the dilemma, we have to vote NOW for the LOA. Its like signing a blank contract, because your in a hurry, and counting on your "friend" the used car salesmen to fill in the details. "Just sign here....don't worry about the details.... you can trust me"....

iarapilot

After again reading the companies position on tax equalization, my carotid is about to burst. Really another example of how the current FDA and soon to be HKG FDA folks have been sold out by a leadership that has no clue. You yes dudes that think it will be different next time.....please, hold your breath for me.

As stated by FedEx...

More Equalization

Tax equalization still seems to be generating questions, and not many good answers. Thanks DW and company particularly regarding the $82,000 U.S. tax exclusion. This is simply a matter of dollars and cents. No sh!t!!! When you live in another country, you have to pay taxes to that country in addition to U.S taxes. The U.S. gives you an $82,000 foreign earned income exclusion because of this, since most countries not all, HKG case in point have higher tax rates than the U.S.
Tax equalization simply tries to make the U.S. citizen pay the same tax as he would in the U.S. And why the h#ll should a citizen pay the same as he would in the US. He is not in the US. That is the point for the FEIE!! Thus, since you do not get an $82,000 exclusion in the U.S., I get one in SFS you also do not get it in a tax equalization program. Oh yea? Let me guess who gets it. Maybe FedEx? The company could have done the tax equalization calculation separately and allowed pilots to keep the exclusion for themselves. That would have been nice. An option to take it or not. What a novel idea! However, that is really a tax holiday, holiday my arse....for whom? not tax equalization. The Company did not consider that option because it is very expensive. No kidding. The company should be the one shouldering the expense. Not those who have already established their foreign residency. Or those that will with a 2 or 3 year FDA tour The goal of tax equalization is to not create a windfall for anyone, If so, then why does the company make a windfall for those who want to go to HKG from SFS? SFS guys are not based in the US McFly. Or those that bid HKG and establish their one year residency requirement. but rather to eliminate the tax consequences and is the implication to the use of the word consequences negative? Not in HKG. All HKG pilots should want those consequence. moving to an FDA as opposed to being based in the U.S.

The company could have attempted to negotiate an LOA without tax equalization, as in the current CBA section 6 language. However, tax equalization was chosen because it benefits almost all the pilots bidding the FDA. yep, most. No one left behind? BS. The company could have made it optional. they obviously didnt. The tax holiday is on me.....you are welcome, for those of you that should be welcome.
Who does it not benefit? The Subic pilots, And those bidding HKG. No one left behind? and pilots with special situations. Why? In Subic, the Company negotiated a special agreement with the Philippine government in 1995 which exempted the pilots (and only the pilots) from paying Philippine taxes. If true, that was a very good thing. I do thank the Company Thus, there was no reason for the company to equalize the Subic pilots and they also received the benefit of the U.S. exclusion. Unfortunately, there is no possibility of negotiating a similar agreement with either the French or Hong Kong governments. We wouldnt expect you to negotiate a similar agreement. Just allow us to have the option of no tax equalization, because FEIE is our right under US tax laws. That way, ALL pilots who bid the HKG FDA will not be subsidizing the Companies expansion. That isnt to radical an idea; is it?

As for those pilots with special situations, again, the LOA was constructed to benefit most pilots. no one left behind....wink wink, stomp stomp It should have been constructed for all Mr. NC It was never intended to be an equalization of each pilot’s unique tax situation. Note that working spouses will not be equalized, thus their tax burden may require both U.S. and foreign tax liabilities.
The bottom line is that each pilot will simply be liable for the taxes he would normally pay if he lived in the U.S., again, you wont be living in the US which is the goal of tax equalization.






I know my drivel is probably getting old for some. For those of you....sorry.

The lack of insight by the NC and MEC to analyze all aspects of this LOA, and then sign off on one that gave away nothing, at a minimum, is what should have happened. The tax equalization is just one example of the irresponsibility of the NC and MEC towards this group as a whole. For those of you who disagree, I would ask if you have read the LOA thoroughly....all aspects, and then have you had your questions answered in an unambiguous way? I highly doubt it.